Haywood v. Haywood, [Ms. CL-2024-0883, Sept. 12, 2025] __ So. 3d __ (Ala. Civ. App. 2025). The court (Hanson, J.; Friday and Bowden, JJ., concur; Moore, P.J., and Edwards, J., concur in the result) affirms the Walker Circuit Court’s order holding the former wife in civil contempt of the judgment of divorce for failing to pay the former husband his share of certain income distributions from corporate earnings.
The court rejects the former wife’s argument that relying on “§ 10A-2A-6.40(a), Ala. Code 1975, provides that a board of directors ‘may’ authorize distributions to shareholders but does not mandate distributions,” she made a sound business judgment to forego distributions to all shareholders in the years in question. Ms. **19-20. The court explains
The “business-judgment rule” generally insulates the acts of officers or directors done in good faith and with sound business judgment from interference by the courts. Michaud v. Morris, 603 So. 2d 886, 888 (Ala. 1992). For the business judgment rule to apply, the officer or director must be a disinterested officer or director. See Roberts v. Alabama Power Co., 404 So. 2d 629 (Ala. 1981) (holding that upon finding that a special committee of disinterested directors had determined in good faith and after investigation that it was not in the company’s best interests to allow shareholder derivative action to proceed, business-judgment rule would not allow court to interfere with committee’s determination). The trial court noted that the former wife had managed ERS and had had control of whether to distribute earnings from 2016 to 2019. The trial court also recognized that the former wife had essentially made distributions to herself from ERS in the form of “increased salaries” and “loans” while denying distributions to the former husband. Accordingly, the business-judgment rule was inapplicable here, because the former wife was not disinterested when she made ERS’s business decisions regarding the former husband’s distributions.
Ms. **20-21.
The court reverses the award of postjudgment interest because “the divorce judgment did not adjudicate or fix an amount of distributions owed to the former husband. Without a fixed sum, postjudgment interest was not recoverable under § 8-8-10. Accordingly, the trial court’s award of postjudgment interest on the distributions from 2016 to 2019 must be reversed.” Ms. *33.